The Contribution of Islamic financial system on the economic order and development

Abstract

The study that link finance and growth takes many dimensions. One of the dimensions is law and finance view. In the beginning, the studies that link the former only look at the finance variables and economic variables. Islamic finance comes up with a new relationship between financial institutions and customers. It may give different character and notion in the financial system in particular and in the economic system in general. This paper is aimed at discussing Islamic laws which are relevant to finance. Specifically, how does it shape the financial system in Malaysia? Most importantly, how does it make the economy to function orderly? And, could it contribute to economic development of a country?